Victoria Land Tax 2025-26: Rates, Thresholds & Surcharges

General information only. This is not tax or financial advice. Consult a registered tax agent for advice specific to your situation.

Victoria has some of the most complex land tax rules in Australia, with multiple surcharges that can stack on top of the general rates. If you own investment property, holiday homes, or land held in trusts in Victoria, understanding the 2025-26 rate structure is essential for budgeting your annual holding costs.

How Victorian land tax works

Land tax in Victoria is an annual tax on the total taxable value of all land you own in the state as at 31 December of the year before the tax year. For the 2025-26 land tax year, the relevant valuation date is 31 December 2024.

Key points:

• Land tax is assessed on the unimproved value (site value) of the land, not the total property value including buildings
• All taxable land you own is aggregated — the tax is calculated on the combined value, not each property individually
• Your principal place of residence is exempt (see below)

General land tax rates (2025-26)

These rates apply to individuals and companies (not trusts):

Source: State Revenue Office Victoria, “Land tax (current rates)” — general rates table, in force from the 2024 land tax year (unchanged for 2025-26).

COVID debt levy (temporary surcharge)

Victoria introduced a temporary land tax surcharge to help repay COVID-era debt, running from the 2024 land tax year to 2033-34. Per the SRO’s COVID Debt Repayment Plan page, it adds:

• A $500 flat surcharge for taxable land value from $50,000 to under $100,000
• A $975 flat surcharge for taxable land value of $100,000 or more ($250,000 or more for trusts)
• On top of that $975 flat surcharge, an extra 0.10 percentage points added to the marginal rate for taxable land value of $300,000 or more ($250,000 or more for trusts)

These changes are already incorporated into the general and trust rate tables on this page — the figures shown are the total amounts payable inclusive of the COVID debt levy, and remain in place until 2033-34.

Trust surcharge rates (2025-26)

Land held in a trust (including discretionary, unit, and fixed trusts) faces a lower tax-free threshold and higher marginal rates. This is because trusts can be used to split income among multiple beneficiaries, and the State Revenue Office applies higher rates to offset that flexibility.

Source: State Revenue Office Victoria, “Land tax (current rates)” — trust surcharge rates table, in force from the 2024 land tax year. Note the trust tax-free threshold is $25,000 (half the general $50,000 threshold), and the top trust bracket converges with the general rate at $3,000,000+.

Trusts that nominate a beneficiary as the principal beneficiary (for fixed and unit trusts) may be eligible to use the general rates instead of the trust surcharge rates. Discretionary trusts generally cannot avoid the surcharge.

Absentee owner surcharge

If you are classified as an absentee owner (broadly, a foreign individual, foreign corporation, or trustee of a foreign trust that does not ordinarily reside in Australia), a flat surcharge applies:

The 4% is charged on the whole taxable value rather than only the amount above the threshold — but it still only begins once you reach the ordinary threshold ($50,000 general, $25,000 trust). An absentee owner holding $400,000 of taxable land would pay the general land tax plus $16,000 in absentee surcharge.

Vacant residential land tax (VRLT)

Victoria imposes an additional tax on residential land that is left vacant for more than six months in the preceding calendar year:

Two categories stay on a flat 1% of CIV no matter how long they have been liable: land in metropolitan Melbourne that has remained undeveloped for a continuous period of five years or more and is capable of residential development, and new residential land that has been unused, unoccupied and unsold for more than three years. Before the 2025 land tax year, the flat 1% applied to every liable property.

Note that the VRLT is calculated on the capital improved value (the total property value including buildings), not just the land value. This makes it a significant cost. A $700,000 vacant property on the ordinary scale attracts $7,000 in its first liable year, $14,000 in the second and $21,000 from the third — on top of any general land tax. Occupying the property, selling it, or a valid exemption removes the liability and resets the count. Use the Vacant Residential Land Tax Calculator to model your own property and year.

From 1 January 2025, the VRLT applies to all residential land in Victoria. Before then, it applied only to specified inner and middle Melbourne council areas. Exemptions are available for properties that are genuinely being renovated (with a planning permit), newly constructed and awaiting first occupancy, or subject to a court order preventing occupation.

Worked example: investment property with $400,000 land value

An Australian resident individual owns one investment property in Victoria with a site value of $400,000. They live in their own home (PPOR-exempt). No trust is involved.

Step 1: General land tax

The $400,000 land value falls in the $300,000 - $599,999 bracket:

Step 2: Check for surcharges

Step 3: Total annual land tax

What if the same property were held in a discretionary trust?

Using the trust surcharge rates for a $400,000 land value (in the $250,000 - $599,999 bracket):

The trust surcharge adds about $1,264 per year in this example. At higher land values the gap widens considerably — for a $1,000,000 holding, the trust surcharge adds over $3,500 ($8,163 trust vs $4,650 general).

Principal place of residence exemption

Your home (the land on which your principal place of residence sits) is fully exempt from land tax in Victoria, provided:

• You are a natural person (not a company or trust)
• You use the property as your primary home
• The land is not used primarily for business or income-producing purposes

If part of your PPOR land is used for an income-producing purpose (e.g., a home office that is a dedicated room, or a granny flat rented out), a proportional exemption may apply — only the non-exempt portion is taxable.

Other exemptions

• Primary production land — exempt if used for genuine farming
• Charitable and religious land — exempt if used for charitable purposes
• Rooming houses — partial exemption for registered rooming houses
• Retirement villages — exempt under certain conditions

Key takeaways

• Victoria’s land tax-free threshold is $50,000 for individuals and companies, but only $25,000 for trusts
• The COVID debt levy is baked into the 2025-26 rates and will remain until 2033-34
• Absentee owners pay a 4% surcharge on the whole taxable value (not just the amount above the threshold), but only once land value reaches the ordinary threshold ($50,000 general, $25,000 trust)
• Vacant residential land in designated areas attracts an additional 1% of the total property value (not just the land value)
• All taxable land in Victoria is aggregated — owning three properties with $200,000 land value each means you are taxed on $600,000, not three separate $200,000 lots
• Holding property in a trust triggers higher rates unless a principal beneficiary can be nominated
• Your PPOR is fully exempt from land tax in most cases
• Use the Victorian Land Tax Calculator to calculate your exact liability for 2025-26
• For how the SRO actually issues your assessment, when the notice arrives, and how to object within 60 days, see Victorian land tax 2026: SRO assessments, timing and objections